MultiChoice Group Announces a 50% Decline in Trading Profit

MultiChoice Group announces a 50% decline in trading profit for the financial year ending March 31, 2025, signaling a tough year ahead for the African entertainment giant. The company revealed in a recent update that its reported trading profit is expected to drop by about half compared to the previous year. This sharp decline is mainly due to several challenging factors, including economic pressures across Africa, currency fluctuations, piracy, fierce competition from global streaming services, and heavy investments in its streaming platform, Showmax.

One major reason behind the MultiChoice Group 50% decline in trading profit is the volatility of foreign exchange rates in key markets such as Nigeria, Kenya, Zambia, and Angola. The depreciation of local currencies against the South African rand has severely affected profitability. For example, in 2024, MultiChoice reported a $217 million loss caused by currency depreciation, with Nigeria’s naira losing half its value. Even when removing the effects of currency changes, the company expects its organic trading profit to fall between 7% and 11%, showing underlying operational difficulties.

Despite the decline in trading profit, MultiChoice Group announces a decline in trading profit alongside a positive outlook for earnings per share. The company expects to move from a loss of R9.35 per share last year to a profit this year. This improvement is mainly due to corporate actions like selling a 60% stake in NMS Insurance Services to Sanlam and adjusting a Showmax-related liability, rather than stronger business operations. Headline earnings per share are also expected to improve by up to 66%, offering some relief to investors.

MultiChoice announces a 50% decline in trading profit

The group described the operating environment as one of “unprecedented financial disruption” in sub-Saharan Africa. Factors such as weaker exchange rates, high inflation, rising interest rates, and power supply problems have tightened consumer spending power, resulting in a loss of subscribers. MultiChoice’s subscriber base has fallen sharply from over 23 million to 19.3 million in under two years, with South Africa losing 5% of its subscribers and other African markets, especially Nigeria and Zambia, also experiencing significant drops.

Structural changes in the video entertainment industry have made things harder. The rise of piracy, competition from global streaming giants like Netflix, Disney+, and Amazon Prime Video, and the growing popularity of social media platforms have disrupted MultiChoice’s traditional pay-TV business. Its flagship DStv service, available in 54 African countries, has seen subscriber numbers fall, particularly in premium and mid-market segments.

A key factor in the MultiChoice Group 50% decline in trading profit is the ongoing investment in Showmax. This streaming service is still in its early stages and has not yet become profitable. MultiChoice invested $90 million in Showmax, which reported a trading loss of $146 million in 2024, despite growing its customer base by 50%. The company sees Showmax as vital for its future and is working to make it Africa’s leading streaming platform, including a relaunch on Comcast’s Peacock platform that successfully reactivated 88% of migrated customers.

To address these challenges, MultiChoice has taken steps such as controlling price increases, cutting costs with a target of saving ZAR2.5 billion in 2025, and growing new revenue streams like DStv Stream, DStv Internet, and KingMakers. The company also raised prices for some DStv and Showmax packages in April 2025, with the Showmax Premier League plan seeing a significant 43.5% increase.

Adding to the uncertainty is a takeover bid by French media company Groupe Canal+, which has offered R125 per share, valuing MultiChoice at about R55 billion. Canal+ aims to create a pan-African media powerhouse but must navigate South African rules limiting foreign ownership in broadcasting. Canal+’s CEO criticized MultiChoice’s diversification strategy and plans to refocus the company on core pay-TV operations if the takeover goes through.

MultiChoice will release its full 2025 financial results on June 11, 2025. Despite the challenges, the company remains optimistic about its liquidity and efforts to adapt to the current economic and industry environment.

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